Problems Note: means the problem may be solved with POM for Windows and/or Excel OM.

nd/or Excel OM. Additionally, further understanding of

commercial MRP software is available by examining Resource Manager for Excel, a system made available by User Solutions,
Inc. Access to a trial version of the software and a set of notes for the user are available at www.usersolutions.com; click on
the Free Software Trials button then the Download Now link, then complete the request form and press submit.

made up of a base, two springs, and four clamps. The base is

Problems 14.1–14.4 relate to Dependent Inventory Model Requirements
assembled from one clamp and two housings. Each clamp has one
• 14.1 You have developed the following simple prod- handle and one casting. Each housing has two bearings and one
uct structure of items needed for your gift bag for a rush party shaft. There is no inventory on hand.
for prospective pledges in your organization. You forecast 200 a) Design a product structure noting the quantities for each item
attendees. Assume that there is no inventory on hand of any of and show the low-level coding.
the items. Explode the bill of material. (Subscripts indicate the b) Determine the gross quantities needed of each item if you are
number of units required.) to assemble 50 brackets.
c) Compute the net quantities needed if there are 25 of the base
J
and 100 of the clamp in stock.
• • 14.4 Your boss at Xiangling Hu Products, Inc., has just
K(1) provided you with the schedule and lead times for the bracket in
Problem 14.3. The unit is to be prepared in week 10. The lead
times for the components are bracket (1 week), base (1 week),
L(4) M(2)
spring (1 week), clamp (1 week), housing (2 weeks), handle
(1 week), casting (3 weeks), bearing (1 week), and shaft (1 week).
• • 14.2 You are expected to have the gift bags in Problem 14.1 a) Prepare the time-phased product structure for the bracket.
ready at 5 p.m. However, you need to personalize the items b) In what week do you need to start the castings?
(monogrammed pens, note pads, literature from the printer, etc.).
The lead time is 1 hour to assemble 200 Js once the other items are
Problems 14.5–14.21 relate to MRP Structure
prepared. The other items will take a while as well. Given the vol-
unteers you have, the other time estimates are item K (2 hours), • • 14.5 The demand for subassembly S is 100 units in week 7.
item L (1 hour), and item M (4 hours). Develop a time-phased Each unit of S requires 1 unit of T and 2 units of U. Each unit of
assembly plan to prepare the gift bags. T requires 1 unit of V, 2 units of W, and 1 unit of X. Finally, each
• • 14.3 As the production planner for Xiangling Hu Products, unit of U requires 2 units of Y and 3 units of Z. One firm manu-
Inc., you have been given a bill of material for a bracket that is factures all items. It takes 2 weeks to make S, 1 week to make T,
 C HAP T ER 14 | MATERI AL REQU I REMENTS P L ANNI NG (M RP) AND E R P

Master Production Schedule for X1

Subassembly
PERIOD 7 8 9 10 11 12 X1

Gross requirements 50 20 100

B1(1) B2(2)
LEAD ON LEAD ON
ITEM TIME HAND ITEM TIME HAND
A1(1) E(1) C(2) D(1)
X1 1 50 C 1 0
B1 2 20 D 1 0
E(2)
B2 2 20 E 3 10
A1 1 5

Figure 14.12
Information for Problem 14.10

2 weeks to make U, 2 weeks to make V, 3 weeks to make W, a component of S. The 20 units of U are needed for maintenance
1 week to make X, 2 weeks to make Y, and 1 week to make Z. purposes. These units are needed in week 6. Additionally, a new
a) Construct a product structure. Identify all levels, parents, and order has been received for 80 units of S due in week 8. Modify
components. the net requirements plan to reflect these changes.
b) Prepare a time-phased product structure. • • 14.10
• • 14.6 Using the information in Problem 14.5, construct a a) Given the product structure and master production schedule
gross material requirements plan. shown in Figure 14.12, develop a gross requirements plan for
• • 14.7 Using the information in Problem 14.5, construct a net all items.
material requirements plan using the following on-hand inventory. b) Given the product structure, master production schedule, and
inventory status shown in Figure 14.12, develop a net require-
ON-HAND ON-HAND ments plan (planned order release) for all items.
ITEM INVENTORY ITEM INVENTORY
• • • 14.11 Given the product structure, master production
S 20 W 30
schedule, and inventory status in Figure 14.13, and assuming the
T 20 X 25
requirements for each BOM item is 1:
U 40 Y 240 a) develop a gross requirements plan for Item C;
V 30 Z 40 b) develop a net requirements plan for Item C.
• • 14.8 Refer again to Problems 14.5 and 14.6. In addition to • • • • 14.12 Based on the data in Figure 14.13, complete a net
100 units of S, there is also a demand for 20 units of U, which is material requirements schedule for:
a component of S. The 20 units of U are needed for maintenance a) All items (10 schedules in all), assuming the requirement for
purposes. These units are needed in week 6. Modify the gross each BOM item is 1.
material requirements plan to reflect this change. b) All 10 items, assuming the requirement for all items is 1, except
B, C, and F, which require 2 each.
• • 14.9 Refer again to Problems 14.5 and 14.7. In addition to
100 units of S, there is also a demand for 20 units of U, which is

PERIOD 8 9 10 11 12
A H
Gross requirements: A 100 50 150
Gross requirements: H 100 50
B C J K C
ON LEAD ON LEAD
ITEM HAND TIME ITEM HAND TIME
D E F G E F E G F G
A 0 1 F 75 2
B 100 2 G 75 1
C 50 2 H 0 1
D 50 1 J 100 2 Figure 14.13
E 75 2 K 100 2
Information for Problems 14.11 and 14.12
• • • 14.13 Electro Fans has just received an order for one the field service manager wants his 10 units of B and F in week
thousand 20-inch fans due week 7. Each fan consists of a hous- 6 and the 10 production units of A in week 8.
ing assembly, two grills, a fan assembly, and an electrical unit.
• • • 14.16 You have just been notified that the lead time for
The housing assembly consists of a frame, two supports, and
component G of product A (Problem 14.15 and Figure 14.14) has
a handle. The fan assembly consists of a hub and five blades.
been increased to 5 weeks.
The electrical unit consists of a motor, a switch, and a knob.
a) Which items have changed, and why?
The following table gives lead times, on-hand inventory, and
b) What are the implications for the production plan?
scheduled receipts.
c) As production planner, what can you do?
a) Construct a product structure.
b) Construct a time-phased product structure. • • • 14.17 Your stockroom manager, Mehmet Altag, arrived
c) Prepare a net material requirements plan. at your desk just after you had completed the net requirements
plan for product A (use data in Figure 14.14 and Problem 14.15),
exclaiming that the cycle counter should be fired. It seems that
Data Table for Problem 14.13
the cycle counter was wrong; there are 3 As available now, not 0,
LEAD ON-HAND LOT SCHEDULED as the original data showed; moreover, 5 Es are also available.
COMPONENT TIME INVENTORY SIZE* RECEIPT
About then, your boss, Joe Orlicky, who overheard the discussion,
20” Fan 1 100 —
says, “You might as well extend the net requirements plan out to
Housing 1 100 — 16 weeks because we just received an order for 10 more As in week
Frame 2 — —
Supports (2) 1 50 100 12 and 5 more in week 15. Additionally, count on the field service
Handle 1 400 500 department wanting 3 more Bs in week 16, as well as those 10 units
Grills (2) 2 200 500 of B and F in week 6. And item G now has a lead time of 4 weeks.”
Fan Assembly 3 150 — Your assignment is to prepare a new net requirements plan, based
Hub 1 — — on the actual inventory (as reported) and the new schedule.
Blades (5) 2 — 100
• • • 14.18 A toy manufacturer has an outstanding order of 1,000
Electrical Unit 1 — —
Motor 1 — —
units for one of its toys in week 7. The table below provides infor-
Switch 1 20 12 mation about the components, on-hand inventory, and lead time.
Knob 1 — 25 200 knobs in Subscripts indicate quantity required for each parent. Assume
week 2 lot-for-lot ordering. Below is the information about the toys:
* Lot-for-lot unless otherwise noted.
ON-HAND
ITEM LEAD TIME INVENTORY COMPONENTS
• • • 14.14 A part structure, lead time (weeks), and on-hand
quantities for product A are shown in Figure 14.14. From the Toy 1 200 A(2), B(1)
information shown, generate: A 2 500 E(1), F(3)
a) An indented bill of material for product A (see Figure 5.9 in
Chapter 5 as an example of a BOM). B 1 200 C(1), D(2)
b) Net requirements for each part to produce 10 As in week 8 C 2 150
using lot-for-lot.
D 3 50 G(2)
• • • 14.15 You are product planner for product A (in Problem
14.14 and Figure 14.14). The field service manager, Mark Moon, E 3 100
has just called and told you that the requirements for B and F F 2 550
should each be increased by 10 units for his repair requirements in
the field. G 1 100
a) Prepare a list showing the quantity of each part required to
produce the requirements for the service manager and the pro- a) Develop a product structure for the toy.
duction request of 10 Bs and Fs. b) Develop a time-phased structure.
b) Prepare a net requirement plan by date for the new require- • • 14.19 Using the data in Problem 14.18, develop net material
ments (for both production and field service), assuming that requirement plans for the toy and Item A.

Figure 14.14 INVENTORY

Information for Problems PART ON HAND PART STRUCTURE TREE
14.14, 14.15, 14.16, and 14.17 A 0 LT = lead time in weeks
A LT = 1
B 2 (1) = All quantities = 1
C 10
B(1) LT = 1 F(1) LT = 1
D 5
E 4
F 5 C(1) LT = 2 D(1) LT = 1 G(1) LT = 3 H(1) LT = 1
G 1
H 10 E(1) LT = 1 E(1) LT = 1 C(1) LT = 2
 C HAP T ER 14 | MATERI AL REQU I REMENTS P L ANNI NG (M RP) AND E R P

• • • 14.20 You need to schedule 10 units of product Alpha for period at a cost of $.25 per unit. The setup costs are $50. Beginning
delivery in 6 weeks. Three units of D and 2 units of F are required inventory is zero, and lead time is 1 week. Shown here are the net
for each Alpha. The lead time for Alpha is 1 week. Lead time for requirements per period.
D is 1 week, and lead time for F is 2 weeks.
Period 1 2 3 4 5 6 7 8 9 10 11
a) Construct a product structure.
Net requirements 35 30 45 0 10 40 30 0 30 55
b) Prepare a time-phased product structure.
c) Prepare a gross requirements plan for Alpha. Determine Keebock’s cost based on
• • • 14.21 Using the information in Problem 14.20, construct a net a) EOQ. b) Lot-for-lot.
material requirements plan. There are 2 Alphas on hand and 4 Ds.
Problems 14.29–14.32 relate to Extensions of MRP
Problems 14.22–14.28 relate to Lot-Sizing Techniques
• • • 14.29 Karl Knapps, Inc., has received the following orders:

Data Table for Problems 14.22 through 14.25* Period 1 2 3 4 5 6 7 8 9 10

PERIOD 1 2 3 4 5 6 7 8 9 10 11 12 Order size 0 40 30 40 10 70 40 10 30 60
Gross
requirements 30 40 30 70 20 10 80 50 The entire fabrication for these units is scheduled on one machine.
There are 2,250 usable minutes in a week, and each unit will take
*Holding cost = $2.50/unit/week; setup cost = $150; lead time = 1 week;
beginning inventory = 40; stockout cost = $10. 65 minutes to complete. Develop a capacity plan, using lot split-
ting, for the 10-week time period.
• • • 14.22 Develop a lot-for-lot solution and calculate total rel- • • • 14.30 Coleman Rich, Ltd., has received the following orders:
evant costs for the data in the preceding table.
Period 1 2 3 4 5 6 7 8 9 10
• • • 14.23 Develop an EOQ solution and calculate total relevant Order size 60 30 10 40 70 10 40 30 40 0
costs for the data in the preceding table.
The entire fabrication for these units is scheduled on one machine.
• • • 14.24 Develop a POQ solution and calculate total relevant
There are 2,250 usable minutes in a week, and each unit will take
costs for the data in the preceding table.
65 minutes to complete. Develop a capacity plan, using lot split-
• • • 14.25 Using your answers for the lot sizes computed in ting, for the 10-week time period.
Problems 14.22, 14.23, and 14.24, which is the best technique and • • • 14.31 Courtney Kamauf schedules production of a popu-
why? lar Rustic Coffee Table at Kamauf Enterprises, Inc. The table
requires a top, four legs, 18 gallon of stain, 16
1
gallon of glue, 2 short
• • 14.26 M. de Koster, of Rene Enterprises, has the master
braces between the legs and 2 long braces between the legs, and
production plan shown here:
a brass cap that goes on the bottom of each leg. She has 100 gal-
Period (weeks) 1 2 3 4 5 6 7 8 9
lons of glue in inventory, but none of the other components. All
items except the brass caps, stain, and glue are ordered on a lot-
Gross requirements 15 20 10 25
for-lot basis. The caps are purchased in quantities of 1,000, stain
and glue by the gallon. Lead time is 1 day for each item. Schedule
Lead time = 1 period; setup cost = $200; holding cost = $10 per
the order releases necessary to produce 640 coffee tables on days
week; stockout cost = $10 per week. Your job is to develop an
5 and 6, and 128 on days 7 and 8.
ordering plan and costs for:
a) Lot-for-lot. b) EOQ. COFFEE TABLE
c) POQ. d) Which plan has the lowest cost?
• • • 14.27 Green Toys, a toy manufacturer in Cairo, Egypt, has
Top Stain Glue Base Assembly
the following master production plan:

Period (weeks) 1 2 3 4 5 6 7 8 9 10 11 12 Short Long Legs

Braces Braces
Gross 1,000 800 1,000 400 200 800
requirements
Brass Caps

Lead time = 1 week; setup costs = E£2,000; holding cost = E£5 per
unit per week; stockout cost = E£10 per unit per week. Develop • • • • 14.32 Using the data for the coffee table in Problem 14.31,
an ordering plan and costs for Green Toys using the following build a labor schedule when the labor standard for each top is
techniques: 2 labor-hours; each leg including brass cap installation requires
1
a) Lot-for-lot b) EOQ 4 hour, as does each pair of braces. Base assembly requires
c) POQ d) Which plan has the lowest cost? 1 labor-hour, and final assembly requires 2 labor-hours. What
is the total number of labor-hours required each day, and how
• • • 14.28 Keebock, a maker of outstanding running shoes,
many employees are needed each day at 8 hours per day?
keeps the soles of its size 13 running shoes in inventory for one